Are Sheldon Adelson's Macau Problems All Down To The Chinese Practice Of Guanxi?

Sheldon Adelson, the Sands casino magnate, is it a fair amount of
trouble at the moment.

Adelson is facing
serious bribery accusations in Macau, the Chinese gambling
enclave which helped propel him from the rich to the super-rich
after he opened the first Western-owned casino in 2004.

To understand Adelson's Macau situation, its worth considering
the environment he was working in. He was conducting business in
an alien and hostile environment (China's mainland official bans
gambling, and can control the amount of mainlanders who visit
Macau). He needed someone with connections in Beijing. To use the
Chinese phrase, he needed someone with guanxi.

Guanxi is a term used in China to describe the use of real-life
social networks to one's own advantage. While such a system
exists to a certain degree in every society, it's difficult to
understate how important it can be in China. Here's how
Rupert Wingfield Hayes of the BBC described it in 2005:

Literally translated, guanxi means connections. But it is
much more than having the same old school tie.

In Europe or America who you know might help you get a job,
or get your child into a decent school.

In China who you have guanxi with can mean the difference
between freedom and jail, justice or discrimination, wealth or
poverty.

Adelson hired a businessman called Yang Saixin to help with the
guanxi aspect of Chinese business. Unfortunately for him, Yang's
guanxi may end up being a serious problem for Sands.

In a lengthy article about Yang and his connection to Adelson
published today,
the New York Times reports that Yang says his main job was
"setting up meetings and making introductions". He had links to
the People's Liberation Army and China's state security
apparatus, and apparently grew somewhat close to Adelson — his
daughter took Mrs Adelson shopping during a visit to Beijing when
she visited, for example.

Unfortunately, the line between guanxi (using personal
connections for gain) and flat-out bribery (using money for gain)
may have become blurred.
The New York Times reports:

[Documents] show that the Sands paid out more than $70
million to companies tied to Mr. Yang for the trade center and
for a Chinese basketball team the Sands sponsored. But several
million dollars appear to be unaccounted for after the projects
were suddenly shut down by the company, The
New York Times found.

What became of any missing money and whether any of it wound
up in the hands of Chinese officials are amount the questions
being examined by the Federal Bureau of Investigation, the
Justice Department and the Securities and Exchange
Commission.